Inflation Reduction Act could give leverage to US climate talks

US negotiators have walked a tightrope at international climate talks – attempting to lead the way for global action as domestic progress in the world’s largest economy and second-largest greenhouse gas emitter greenhouse remained largely blocked.

But if the climate and health care agreement signed by Democrats Sens. Chuck Schumer of New York and Joe Manchin of West Virginia known as the Inflation Cut Act becomes law, US negotiators could head to the next UN climate meeting in Egypt in November with at least some real leverage.

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The bill includes a variety of incentives to generate clean energy, switch to electric vehicles and improve efficiency – largely a set of carrots, unlike the sticks of some previous legislative attempts to punish or to tax issuers.

“Goodwill and good faith negotiations are at the heart of a successful multilateral system. And you can’t have negotiations in good faith if the whole premise is, “We’re going to make others do things that we’re not willing to do ourselves.” You can’t trust a system that works like that,” said Sonja Klinsky, an associate professor at Arizona State University and an observer at the UN climate negotiations since 2009. “I think that [bill] is an attempt to show some good faith on the part of the United States, and that may facilitate some of these negotiations.

The Inflation Reduction Act would represent the country’s biggest investment in climate change mitigation efforts to date. The bill includes $369 billion in tax relief and other climate-related incentives that experts say could help the United States achieve a 40% reduction in greenhouse gas emissions from to 2005 levels by 2030 – not quite the 50-52% promised by the Biden administration, but far further than with no legislation at all.

“It doesn’t go as far as what President Biden originally wanted to do. But the fact that there is a bill … sends an extremely important signal, I think, to the rest of the world regarding national climate policy,” said Rishikesh Ram Bhandary, deputy director of the Global Economic Governance Initiative of the Boston University. “This provides a credible basis to continue to engage with the rest of the world and to continue to urge other countries to maintain momentum as well, if not do more.”

Progress at home, progress abroad

The centerpiece of the legislation is the tens of billions of dollars that would go to boosting renewable energy, including solar, wind and geothermal power, among other sources. There are also incentives to keep existing nuclear power plants open, as well as others for sustainable aviation fuel and reducing methane leaks from natural gas wells. People with low or middle incomes could receive assistance of $7,500 for the purchase of an electric vehicle, among other individual incentives.

“I think it’s definitely a signal that this current administration is trying to do its best to take serious climate action, which I think other countries will take note of,” Klinsky told Grid. This year in Egypt, it is hoped that countries will update their emissions targets to reflect greater ambition, and money for the developing world will also be a central topic.

In general, international climate negotiations are a delicate dance, with countries pushing for action but also trying to ensure that their own economic and development goals remain within reach. In previous years, it has been difficult for the United States to play the kind of leadership role that the world’s largest economy should play in such an important negotiation.

“Confidence in the United States in the climate negotiations is very low, because the United States first shaped the Kyoto protocol, then the Paris agreement, in accordance with its own preferences, then did not not ratified first and withdrew from [the] last,” said Hayley Walker, an assistant professor at IÉSEG School of Management in France and an expert on international climate negotiations.

The United States has also repeatedly failed to pass meaningful climate legislation at home, perhaps most notably with the failure of the Waxman-Markey bill in 2009, which would have established a carbon trading market. emissions. Later that year, at the highly anticipated meeting of the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP15) in Copenhagen, then-President Barack Obama was forced of going late to the climate talks to try to salvage what ended up being a disappointing global deal.

“I would say having national legislation at least gives the United States some credibility on the international climate circuit,” Walker told Grid. “It’s unclear if that credibility can translate into leverage, but the opposite – a lack of leverage due to no domestic policy in place – is what we’ve seen with the administration. Obama in Copenhagen in 2009, when the United States had a very difficult time trying to persuade others to go along with their point of view.

Bhandary accepted. He said that during the Obama years, negotiators essentially had to rely on a reserve of global goodwill rather than evidence of national climate progress. The Trump-era utter abandonment of international climate goals, including withdrawal from the Paris climate accord (Biden joined the accord when he took office), has further eroded US legitimacy on the global climate scene – the legitimacy that Biden and his allies in Congress are trying to win back.

Roadblocks in the bill

The Cut Inflation Act is therefore clearly a step in the right direction, but Klinsky pointed out that the bill had certain features and lacked others that made it a less than perfect centerpiece to bring to Charm. el-Sheikh, Egypt, for COP27 in November.

“That still allows for significant fossil fuel development in the United States,” she said. “And that’s going to be an increasingly tense question as we look at the global carbon budget.”

Scientists have estimated that emissions reductions of 1.5 billion tonnes of CO2 per year must be removed if we are to achieve net zero carbon emissions by 2050, the goal that could help avoid some of the worst impacts and stabilize the climate. Instead, emissions continue to rise, making the development of new fossil fuels very problematic.

The bill mandates new leases for offshore oil drilling in Alaskan and Gulf of Mexico waters, and sets annual minimum acreages for oil and gas drilling as preconditions for licensing certain renewables.

“There will be very specific questions from countries in the South about why they are being told they need to phase out fossil fuels when they have not benefited significantly from fossil fuels, and that the richest and largest economies in the world continue to develop their own fossil fuels,” Klinsky said. “That’s going to continue to be a tension in the negotiations.”

There is also nothing in the Cut Inflation Act about international climate finance, an increasingly central topic in negotiations as rich countries have failed to deliver on their promises to pay the developing world to adapt and grow in the warming world. Still, there is no doubt that should the bill become law, one of the central players in the climate negotiations would sit at the table with better cards to play.

“If that hadn’t materialized, I think you would be in a situation where the Biden administration wants to play a global leadership role but would have found itself severely crippled by the lack of concrete national actions,” he said. said Bhandary. “It’s a signal that the US government is serious about climate change.”

Thanks to Alicia Benjamin for writing this article.